Issue: 1151 Date: 9/13/2012
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Rising local home prices may signal start of recovery

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Home prices in St. Louis rose 2.5 percent from June to July, according to CoreLogic, providing more evidence that the five-year slide in home prices here may have finally ended.

Prices are also rebounding nationally, up 1.3 percent from June to July, the real estate data company reported Tuesday.

Corelogic's report of rising St. Louis prices follows reports from Clear Capital, another data company, and the Federal Housing Financing Board, which both found prices rising as of last spring.

Sales are rising too, up 25 percent in July in St. Louis city and county, compared with the same month last year, according to the St. Louis Association of Realtors.

"It looks like we're off the bottom," said Shawn Kelsey, a broker who analyzes sales data at Keller Williams Realty in Chesterfield. The median sale price of a St. Louis County home was 152,000 last month, he noted, up from $144,000 a year earlier.

After a soft winter, prices started picking up in spring, said Jim Dohr, president of Coldwell Banker Gundaker, one if the region's largest real estate sales firms.

"It's really in the past five months that we've seen stabilizing or rising prices," he said. "It's modest. I don't think anyone should get excited that we might see a new bubble."

Measuring the trend in home prices is difficult because houses vary so widely, and sales swing by the season. But recent measures point upward in St. Louis.

Last month, the Federal Housing Finance Agency reported that prices here rose 3.28 percent in the second quarter. That was the biggest three-month jump since the agency began keeping this record in 1991.

It's a matter of supply and demand, say Dohr and Kelsey. Sales are up sharply - they've been rising for 14 months - but the number of homes on the market isn't. In July, when sales rose 25 percent, 1,400 new homes came on the market in St. Louis County, the same number as a year before.

St. Louis County now has a five month supply of homes on the market at the current sales rate, says Kelsey. A five to six month supply is considered a balanced market, with no advantage to buyer or seller.

Dohr thinks pent-up demand is driving increased sales, along with low interest rates and home prices. "People were sitting on the fence for three or four years," he said.

Nationally, CoreLogic says July's prices were 3.8 percent above the same month a year earlier, the biggest yearly jump in nearly six years. St. Louis prices in July were 0.6 percent above July of last year, the company said.

"The housing market continues its positive trajectory with significant price gains in July and our expectation of a further increase in August," said Mark Fleming, chief economist for CoreLogic, speaking of the national trend. "While the pace of growth is moderating as we transition to the off-season for home buying, we expect a positive gain in price levels for the full year."